Crypto, Stablecoins and Digital Assets

Crypto began in 2009 as an attempt to build money without banks. Seventeen years later its most profitable business is a near-copy of a very old banking model: take in dollars, hold them in short-term government debt, and keep the interest. Tether, the largest stablecoin issuer, reported more than $10 billion of net profit for 2025 with a staff of a few hundred, on about $186.5 billion of tokens in circulation (BDO attestation, reported). Around that core sit the other businesses of digital assets: exchanges and brokers that earn trading fees and spreads, custodians that hold keys, lenders and "yield" platforms, decentralized protocols that run trading and lending as code, miners and validators, and a growing set of traditional-finance wrappers such as spot bitcoin ETFs and tokenized money-market funds. The sector's history is a sequence of booms and collapses, and the collapses (Mt. Gox 2014, Terra, Celsius, Three Arrows and FTX in 2022) were nearly always old financial failures in new clothes: maturity mismatch, related-party lending, commingled customer funds and leverage. From 2025 the US moved from enforcement to legislation. The GENIUS Act (signed 18 July 2025) created a federal regime for payment stablecoins, the SEC dropped most of its exchange cases, and a market-structure bill (the CLARITY Act) passed the House and stalled in the Senate. This section explains how each business makes money, what stablecoin reserve economics look like and why distribution is where the profit goes, how DeFi works, where crypto meets banks, how US federal and state regulation works (with EU and Asian comparisons), what central bank digital currencies are for, and what the failures teach. A worked example computes a stylized stablecoin issuer's economics through a rate cycle and a redemption run; a case study reconstructs the 2022 collapse.